The co-owner of a go-kart racing business in Jersey City, N.J., doesn't want to have to pay her 31 hourly employees when they call in sick to nurse a cold or other illness.

"The standard in the work environment for a part-time role is that you're paid only for the hours you work," says Karen Davis-Farage, also president of two other Pole Position Raceway franchises, with more than $6 million in total revenue last year. The cost of paying absent workers, plus their replacements to greet customers and organize...